The Labour government is already being dismissed as a standard tax and spend administration, as if raising taxes and public spending were some kind of socialist novelty. The verdict is a couple of words short. This is a Labour government which, so far at least, is looking to tax, spend and hope—the hope in question referring to its faith in the capacity of the state. It is standard Labour doctrine, and it was there from the start.
In 1917 Sidney Webb drafted the euphonious Clause IV of the Labour constitution, which committed the party to the public ownership of the commanding heights of the economy when it was approved the following year. In 1920, with his wife Beatrice, Webb published A Constitution for a Socialist Commonwealth of Great Britain. It exhibits an uncritical confidence that commerce stands in need of government help which echoes through the currently vague arguments for an industrial strategy. “Today it seems, in the Labour and Socialist world,” write the Webbs, “that the vital question is who should give orders and who should obey them—whether the government of industry shall be from above or from below.”
The chancellor had little option in her Budget but to raise taxes. The inherited state of the public finances is dire, and the range of the money raised was momentous. The rise in current spending announced by Reeves was the largest in real terms since the 2000 spending review. Total public spending is now forecast to settle at 44.5 per cent of GDP by the end of this decade, which is almost five percentage points higher than before the Covid-19 pandemic. By the end of this decade the tax take is forecast to grow to a record peacetime high of 38.2 per cent of gross domestic product. This takes Britain closer to the spending profile of the European social democracies than the smaller state of America. The verdict from Bloomberg was typical. The Budget, in the estimation of economics reporter Philip Aldrick, “represented a fundamental shift back to big state economics more than 40 years after then prime minister Margaret Thatcher launched her project to roll government back”.
It was clear enough in the Budget who was giving orders and who was expected to obey them. The legal minimum wage was increased for 18- to 20-year-olds by 15 per cent. The government committed to building 1.5m new homes in its first parliament. The school estate will be rebuilt. The same inclination ran through the King’s Speech in July. The capacity of the state will be called upon in the bills to renationalise the railways, to create GB Energy to run public renewable energy projects, and in the National Wealth Fund.
Down the years, anyone who is a veteran of Labour thinktanks and policy conferences, of which there is always a profusion, will have been to tens of seminars in which a qualifying adjective was applied to the capacity of the state. The Enterprising State, the Active State, the Enabling State, the Popular State. The qualification may change but the device is the same. We have hit here on something basic in British politics. The real battle is not between people who believe in good versus those who believe in bad. Neither is it really equality versus freedom, as there are plenty of people on either side who believe in a version of both. The real divide is a difference of faith in method. Members of the Labour party are more inclined to believe in the efficacy and the benignity of the state. Members of the Conservative party are correspondingly less inclined.
The source of this distinction, on the Labour side, lies with Sidney and Beatrice Webb. They were a remarkable couple. The Fabian Society, the London School of Economics and the New Statesman would probably not exist without them. As a young woman, Beatrice Potter had assisted her cousin by marriage, Charles Booth, in his survey of the slums of Victorian London, which he eventually published in 17 volumes as Life and Labour of the People of London. For four years between 1905 and 1909 Beatrice was a member of the Royal Commission on the Poor Law. In a notable dissenting report issued as an addendum to the main commission, Beatrice Webb’s demand for “a national minimum of civilised life” is a prefiguring of the welfare state. One of the researchers on the Minority Report was a certain William Beveridge. After four years in a stormy relationship with Joseph Chamberlain, Beatrice had married Sidney Webb in 1892. For 50 years they researched and wrote together. Sidney, as the first Baron Passfield, became the colonial secretary in Ramsay MacDonald’s government.
There was a piety about the Webbs, which runs through the Labour movement, and which was easy to mock. In his 1911 novel The New Machiavelli, HG Wells lampooned them as Altiora and Oscar Bailey, a pair of myopic, lofty bourgeois social programmers. Wells was also critical of the dominance of the Webbs within the Fabian Society: “they permeate English society with their reputed Socialism about as much as a mouse may be said to permeate a cat.”
There was, indeed, something severe about the couple. Before she became Baroness Webb, the future Baroness Passfield was born as Beatrice Potter—but there is nothing as joyful as Jemima Puddleduck or Peter Rabbit in her diaries. Their faith in measurement was absolute. “The Works Committee, the District Council, the National Board, the Social Parliament itself,” they write with characteristic confidence in A Constitution, will have at its disposal, “as a matter of course, a stream of reports from independent and disinterested experts.” The Webbs could never get enough of experts. They believed the world to be reducible to scientific measurement. The good could be calculated and enacted by the state. It is a belief that has resounded down the ages, from the constitution of the Webbs to the treatment of the commonwealth of the nation by Reeves in her Budget.
The Webbs themselves ended in disgrace and a question now hangs over their reputation. The question mark at issue was included in the first edition of their joint volume Soviet Communism: A New Civilisation? in 1935. By the second edition in 1941 and the third edition in 1944, the question mark had been removed. AJP Taylor called it “the most preposterous book ever written about Russia”. Sadly, it wasn’t even their worst book. The Truth About Soviet Russia (1942) was an even blinder account of what was by then obvious about Stalin for all those with the eyes and the will to see. In a sense, this was a natural endpoint for a pair of thinkers with a tendency to be naïve about the capacity of the state to erode freedom and too optimistic about its capacity to do good.
We should not let their later absurdities crowd out what was genuinely remarkable about the lives and works of Sidney and Beatrice Webb. Their Fabian doctrine of the “inevitability of gradualness” combines two Labour impulses that are everywhere in tension. The claim to inevitability captures the millenarian strain of destiny in Labour thinking. The caveat of gradualness adds a tone of evolutionary caution. The same tension is written through the Starmer government. In his victory speech in Downing Street in July, Keir Starmer commended a politics that would “tread more lightly on your lives”. After the Budget, the constitution for the commonwealth seems rather heavier than that.
